Bank of America mortgage promo - No Fee Mortgage PLUS

daerox - all in all you have to compare everything altogether to see what makes most sense. Compare rates and see what the payment difference and and the savings over the years. Also, find out exactly what closing costs are paid. Countrywide is now a Bank of America company. And we have a very similiar program to that as well. It really comes down to the individual loan officer and what that person can offer as opposed to what the "bank" is offering. Not sure exactly what your situation is but it may or may not make sense. Also, we still allow 10% down up to $729,750. sunny_hong@countrywide.com

Whoa, I heard you the 1st time, lol. This is what it covers according to the website.. The second line is BoA

Typical mortgage closing cost fees
Fees and closing cost estimates Typical Loan No Fee Mortgage PLUS
Origination Fee $2,000 $0
Application Fee $422.50 $0
Commitment Fee $565 $0
Document preparation $170 $0
Funding fee $225 $0
Processing $376.25 $0
Tax Service $66.40 Paid by Bank of America
Underwriting $255 $0
Wire Transfer $30 $0
Appraisal $321.88 Paid by Bank of America
Attorney, Closing or Settlement Fee $395 Paid by Bank of America
Credit Report $14.08 $0
Flood Certification $11.80 Paid by Bank of America
Pest and other inspection1 $50 Paid by Bank of America
Postage / Courier $27.82 Paid by Bank of America
Survey1 $175 Paid by Bank of America
Title Insurance $617.94 Paid by Bank of America
Title work: Title search, plot drawing, name search, endorsements $204.17 Paid by Bank of America
Total closing costs and fees $5927.84 $0

I love the no PMI gimic. They are only juicing you on the rate to cover the mortgage insurance. Nothing is free. Based on my experience, most borrowers with great credit can get no application fee/no closing costs. That 1/8th of a point is going to cost you ~$1.25 for every thousand dollars you borrow...multiply that by 12 and see what your savings are.

Obviously worth investigating. But keep in mind that the bank-related closing fees are only a subset of the total closing costs. You'll still have YOUR attorney fee, not to mention the state mandated costs (e.g., mortgage tax). And if you're buying new construction, what about the "sponsor" closing costs, typically paid by the buyer?

Your list, as you'd expect, covers the bank closing costs, only. Some are typical, some are wildly inflated, many are what would be considered "junk" fees. I mean origination / application / commitment / funding / underwriting fee? Even if these charges are "free", how many times would someone pay for the same thing over and over?

Whoa, I dont know what that was all about...hopefully this doesnt post 10x again. What is the rate they are offering and which program?

I know this covers only the bank closing fees. I still have to pay the condo closing fees which include a $9,500 transfer tax because its new construction. I had planned my closing costs to be in the mid $20K, but with this promotion, I should only be in the mid teens. As far as the extra 1/8 on top of the rate, it would only be around an extra $40 a month if you do a comparison from a 6.5% rate to 6.625%. The extra $40 definately beats having to pay $200 a month in PMI. Wells Fargo has the option of them paying the PMI for you, but the interest rate would be a lot higher, so it would end up like you're still paying the PMI.

Please help me understand this - If I were to borrow 700K for a mortgage and I do 1st mortgage with 417K conforming and the remaining as a purchase LOC at interest only prime.. where is the PMI here ?
And do banks in current market allow something like this ? The down payment I am looking to do is 25~30% on the price of the apt.
Thanks

That's what I was going to do, but Wells Fargo said I can't get a second loan to cover the balance from 417K to the rest of the mortgage. They said that I now need to pay the PMI. But this is because I was only going to put 10% down. I believe if you put 20%+ down, you don't need to pay PMI.

Daerox, Is BoA giving you a 2nd line as LOC ?

I'm not sure because I haven;t gone through all the details. That might explain why I wouldn't have to pay PMI charge. But since Wells Fargo said they couldn't do that anymore, I doube BoA will do it.

Citibank is doing it since the agent confirmed that I would get a commitment letter from them.. But I doubt it.

I looked into the no fee mortgage plus and it's not as good as it sounds. Basically it's a dual loan so they put $417K on the first loan and balance goes on a 2nd loan is based on prime. The low closing costs are nice, but you get absolutely killed on the 2nd loan. The rate would have been 8.5% for me. I was putting 20% down so the PMI benefit wasn't an issue. If your mortgage is close to $417K it might be worth it, but if you are significantly above $417K you will get killed. In my situation, going with BofA would have cost me about $30K more over the life of the loan than with the bank I ultimately went with. In addition, the people at BofA are extremely unresponsive, to the point that it's scary. I would recommend really analyzing this before you go with them.

My loan after my 15% down is going to be $412K so sounds like I should be OK.

jsey9, how much was your balance on the 2nd loan ? prime is around 5% now..Who did you end up going to, would you mind sharing this information ?

daerox - if your loan is under 417,000 then there should be no reason for a second loan ... the only reason that they would give you the second loan is to bring it down to the conforming limit ($417,000). All that really gets you is a lower rate. PMI may be required becasue you are financing more than 80% of your loan (you are at 85%). I still find it hard to believe that you are not able to find a bank that won't give you a loan without PMI for a conforming loan, with good credit and 15% down (not that it's easy but I know that there are banks willing to do that).

All that said, if you are closing now you can probably get a 30 year loan with a local bank for about 6% right now so that will more than cover your $6,000 that you are supposedly saving in monthly costs.

go on zillow.com and I guarantee you that you can get 6% if not lower. BofA has the worst pricing out there ... but yes they do waive your closing costs, lol.

http://www.zillow.com/mortgage/Mortgage.htm

What you can always do if not having 20% financing becomes a problem is to take out a first loan that is equal to 80% financing and then take a second loan for the remaining balance (the remaining balance will have a higher rate but for a smaller amount)

your loan at 15% down is 412,000 which means that you put down 72,750. you would really need to put down 97,000. so, you would need to take out the first loan of 370,000 to have 20% down with your 72,750. and then take a second loan for the remaining 115,000 -- you would need to do the math as to whether or not this would be worth the PMI.

either way...BofA has horrible rates!

As someone who has been chosen to represent 11 buildings as a new development financing specialist, I too often see people go to various banks all at the last minute incurring heavy fees and penalties from the sponsor because the bank cannot close on the building due to issues with sales, commercial rents, occupancy, fidelity bond coverage, tcos, common area completion, investor concentration, homeowner association, insurance, and finally loan program expiration are all issues 99% of mortgage brokers and bankers don't have a clue about. 260 lenders who were out there last year no longer are in business. Chances are, a mortgage broker will not be able to close this loan. I suggest you call one of my team members to make sure you will be able to close on this purchase. You will be able to lock in a rate today for up to 12 mos if necessary, and receive a floatdown feature to use before closing.

website is below:

http://homeloan.chase.com/david.j.strause

I would, but I put my info on Chase's website and it had the worst rates with PMI charges for loans less then 20% downpayment. If I had 20% to put down then I would contact you because Chase's rates are competitive. Thanks anyway.

Narayap,

I ended up going with JP Morgan Chase, who had better rates. The balance on the 2nd loan with BofA was roughly 200K. Their 2nd loan under the no fee mortgage plus, is based on prime plus a margin, which put me at 8.5% on the 2nd loan. If your total mortgage is near 417K it may be worth it. Also worth noting is the 2nd loan is a 15-year balloon, so it's due in full in 15-years (not that you couldn't refinance, but just something they don't make very clear). Finally, just be real careful with the people at BofA as their service is just terrible in my experience. I would typically wait 72 hours between call backs, which just doesn't cut it and everytime it was like I just introduced myself again for the first time.

daerox - today your rate on a 412k loan at 85% financing will be 6.625% with NO PMI and NO POINTS on a 30 years fixed mortgage

And depending on what area youre looking to buy you might even be able to get 6.5%

NO TO BofA

thanks jsey9 for the details. My loan numbers are close to yours. I did get very good rates from CITI with a prime on the 2nd loan. The only thing with the 2nd loan - it was a LOC to be kept open for 3 years. No prepayment penalty. Amoritized in 10 yrs. Was your 2nd loan different from what I have described ?